Play Recommendations:

Lotto Weekly Options:

Calls: 640 (No Trade)

Nov Options:

Puts: 500 or 480 (No trade)

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11/1/12 - PCLN bests earnings estimates and says they will be on track to meet or beat Q4. Stock takes off 10% in after hours. So far my 640's will be in the money tomorrow if PCLN holds this gap up. Tomorrow I will look for another Lotto Trade opportunity for a day trade. If the stock gets over $650 there could be a continuation rally; otherwise, I would look for a pull back to $600 at a test of tomorrow's gap. With elections coming next week, and if the employment report is a bust, I expect PCLN to pull back on profit taking.

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10/30/12 - Thursday is the earning release for PCLN. With the markets being closed for the past two day due to hurricane Sandy, trading will be a bit of a mess the rest of the week. In the past, whenever there was a "disaster" of sorts, the markets tend to show resilience and rally.

PCLN has been in a strong bearish drop heading into these earnings, but found support at the $560 area where it previously found it from the last earnings disaster. Friday's trading put in a nice bullish gap and +3.87% move, but I suspect that was more in conjunction with the EXPD earnings report. If EXPD is doing good, PCLN must be doing better, so if they beat, we could see a continuation and a move to the 100MA at $625. If the overall markets are putting in a relief rally, that could make it easier to get there.

Last quarter, PCLN disappointed and the stock dropped a massive $120 per share and my Lotto Puts banked a nice profit! Will they do it again?

Last quarter                                                           This quarter the chart looks similar

Trading options on a stock like PCLN is tough because the options are massively over priced. In the past, I have had massive success with this stock, but it's usually on a Friday when the weekly options are dirt cheap and the stock makes a nice move. This time around, I suggest you go with NOV expiration since we have had two closed days and there is no way to really gauge how this stock will react.

Here are the current weekly options prices, and as you can see, they are very expensive. In fact, if you were to speculate with the $620 calls those will cost you $11.10 for zero intrinsic value...ridiculous.

This chart below shows you that resistance all the way back in Feb kept Friday's gap from continuing. This could be a tough area now for PCLN to get over and if they miss, look out below.

The LOTTO play here will be on the NOV12 (monthly) PUTS because we need more time for the play to work out if it's bad news.

If this stock repeats last quarter, I want to make sure I am deep ITM so I would recommend no further OTM then 480.

NOV12 PUTS

Because the calls are ridiculously priced, I am going to see if I can find a cheap trade on Friday and catch a big move. I may pick up some calls on Thursday before the close if I can stay within an 8% move and the price is not ridiculous, but I will definitely be on the hunt Friday morning.

Here is what can happen on a Friday with PCLN:

Profits Up!

The donFranko